Nothing is more frustrating than investing time into your ideal candidate throughout the hiring process, only to have them reject your offer. In a tight talent market, a competitive offer could be what stands in the way between hiring the right person and hiring the wrong person.
It Is Expensive to Pay Less
The fact is, talented people know what they are worth in the market. When someone discovers they are being underpaid, they will seek out a more lucrative role at another company. Candidates – especially in today’s market – have a host of tools at their disposal to discover market rates, and if your offers fall out of line, they will not accept. Paying competitively ensures you not only attract top talent, but you can keep that talent as well.
Fair Compensation Avoids Bias Perceptions
Today, women earn just 82 cents for every dollar a man earns, and people with Hispanic or Latino ethnicities earn just 59 cents for every dollar Asian workers earn. Wage gaps still exist, and a formal compensation strategy can reduce those gaps and ensure candidates and employees will be paid fairly, regardless of gender, age, ethnicity or background. By setting competitive pay ranges for specific roles, salaries can be adjusted based on experience, skills, education, and performance. The more formalized, uniform and competitive your packages, the better. Employees will appreciate your commitment to fairness and transparency, and candidates will be attracted to your fair work policies.
You Get What You Pay For
If your company consistently underpays employees, you will not attract the best and the brightest talent. It is necessary to research local pay rates for the jobs you offer and fall squarely in line, otherwise, you will attract people who simply can’t hack it at other companies. When you invest in your employees by paying them competitively, they will invest in you with loyalty, reducing the need for uncomfortable conversations when talented people inevitably ask for a compensation package that falls into market ranges.
Competitive Offers Are Not an Exact Science
Unfortunately, what motivates one candidate might not be what motivates another. However, by taking the time to understand market rates and offering fair compensation based on skills and experience, you can remain competitive in the war for talent.